All you must know about MSME registration in 2022

The Ministry of Micro, Small and Medium Enterprises, an executive branch of the Government of India, develops and administers rules, regulations, and laws related to micro, small, and medium enterprises in the country.

MSME: What is it?

Over 8% of the country’s GDP is generated by MSMEs, around 45% of the country’s manufacturing output, and approximately 40% of the country’s exports are generated by MSMEs. We can consider them to be the country’s economic backbone.

According to the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, the Government of India has introduced MSME, or Micro, Small, and Medium Enterprises. The primary activity of these firms is the production, manufacturing, processing, or preservation of goods and commodities.

MSMEs have contributed immensely to the socio-economic development of India and are an important sector of the Indian economy. Additionally, they contribute to the development of rural and backward areas of the country. There are around 6,08,41,245 MSMEs in India, according to the annual report by the Government (2018-19).

MSMEs: Features

MSMEs must have the following elements –

• Contribute to the welfare of artisans and workers
• Provide funding or credit limits through banks
• Provide specialised training centres to promote entrepreneurship and skill up-gradation
• Support technological development, infrastructure development, and modernization
• Provide assistance to improve access to domestic and international markets
• Provide modern testing facilities and quality assurance
• Assist  in packaging, product development, and design intervention

MSMEs: Role in the Indian economy

As a sector of the Indian economy, the MSME segment has proven to be highly dynamic since its inception. Small and medium-sized enterprises (SMEs) produce and manufacture products for both domestic and foreign markets. They have facilitated the growth and development of khadi, village and coir industries. To ensure the development of rural areas, they have collaborated and worked with the concerned ministries, state governments, and stakeholders.

In rural areas, MSMEs have provided essential employment opportunities. They have contributed to the industrialization of these areas at a lower cost than large industries. The MSME sector has made a major contribution to the socio-economic development of the nation as a complementary unit to large sectors.

As well as contributing to the development of the country, MSMEs also provide essential services in different areas such as low investment and flexibility in operations, mobility between locations, low imports, and high domestic production.

It has the capability of developing appropriate local technology, providing fierce competition on domestic and international markets, supporting technology-savvy industries, contributing to the creation of defence materials, and creating new entrepreneurs by providing knowledge, training, and skills up-gradation.

MSMEs: How important are they to the Indian economy?

It is widely accepted that MSMEs contribute to economic growth and to equitable development across the globe. In the economy, they generate the highest growth rate. Due to their low investment requirements, flexibility of operations and ability to develop native technologies, MSMEs have propelled India to new heights.

• After agriculture, MSMEs generate employment for around 120 million people.
• This sector contributes about 6.11% of GDP from manufacturing and 24.63% from services throughout the country.
• Towards a $5 trillion economy, India’s MSME ministry aims to contribute 50% to GDP by 2025
• Approximately 45% of Indian exports go to this country
• Small and medium-sized businesses promote all-inclusive growth by creating jobs, especially for people from rural areas belonging to the weaker sections of society.
• By providing entrepreneurs with an opportunity to build creative products, MSMEs promote innovation, which boosts business growth and competition.

As a defence against global economic shocks and adversities, the MSME sector provides silent support to the national economy. By means of a silent revolution that is powered by MSMEs, India is poised to become a strong global economy.

MSME: Registration documents required 

The only documents required for MSME registration are the Aadhaar Card and the PAN Card. The MSME registration process is completely online, and no other proof of document is required. Udyam Registration Portal will automatically gather PAN and GST-related information about investments and turnover of enterprises from Government databases. GSTIN and Income Tax are fully integrated with Udyam Registration Portal.

MSME: Registration process

You can register your business online by following the steps below:

• Go to the official website.
• Click on the option that best describes your registration stage. New entrepreneurs can click on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II,” button. But if you’d like to migrate or re-register to Udyam, click on either of the following options:
  • For those already having registration as UAM
  • For those already having registration as UAM through Assisted filling
• If you click on the button for new entrepreneurs, you will be sent to the registration page. Now, the entrepreneur must enter their Aadhaar number and name (as displayed on Aadhaar). Click on the checkbox, and select ‘Validate & Generate OTP.’
• On the next page, you need to enter your PAN details and post PAN verification and filling Udyam registration details, the registration process will be completed. If an entrepreneur doesn’t have a PAN card, they can bypass this process and directly fill in the registration details to complete the registration process.
• If you’d like to migrate or re-register, click on your choice. This will take you to a new page.
• Here, enter your Udyog Aadhaar Number. 
• Now, pick your OTP generation option between:
  • OTP on Mobile as filled in UAM
  • OTP on Email as filled in UAM

and click on Validate & Generate OTP.

• After entering your OTP, fill in your registration details and your Udyam migration/re-registration will be complete.

MSME: Registration fees

The registration of MSMEs on the government portal is free of charge. As of 30/06/2022, enterprises with UAM registration need to migrate to Udyam Registration. The UAM registration of entrepreneurs who have not upgraded to Udyam Registration by 30/06/2022 will become invalid, and they will not be able to receive any of the benefits offered to MSMEs. For MSME benefits, they will have to re-register with Udyam.

MSME: Registration certificate

After submitting the MSME registration form online, you will receive an email with a reference number. The Ministry of MSME will send the Udyam Registration certificate or MSME certificate to the email address provided by the entrepreneur after it has verified the information provided on the registration form.

MSME certificates will be issued by the Ministry a few days after the registration is completed. They are valid for a lifetime. No renewal is required. 

MSME: How to get MSME certificate online

Obtaining an MSME certificate online requires an entrepreneur to visit the Udyam Registration portal and download the MSME certificate. To obtain the MSME registration certificate, follow these steps:

• Entrepreneurs must click the ‘Print/Verify’ tab on the homepage of the portal, and then click the ‘Print Udyam Certificate’ link.
• On the next page, entrepreneurs will need to enter their Udyam Registration Number, mobile number, and select the OTP option then click on the ‘Validate and Generate OTP’ button.
• Click on the ‘Validate OTP and Print’ button and enter the OTP.

The MSME registration certificate appears on the page, which can be printed. Upon submitting the MSME registration form, entrepreneurs can check the registration number based on the reference number they were given.

An entrepreneur can get the MSME registration number by clicking the ‘Verify Udyam Registration Number’ option on the ‘Print/Verify’ tab on the homepage. When the entrepreneurs open the new page, they must enter the reference number, and captcha code, and click on ‘Verify.’ A screen will appear with the MSME details and registration number.

 

FAQs

What is the validity of MSME certificates?

MSME certificates are valid for a lifetime and no renewal is required.

What are the documents required for MSME certification?

The documents required for MSME registration are the Aadhaar Card and PAN Card.